Starting in July 2019, IRS
Notice 2019-45 allowed health savings account (HSA)–eligible health plans the flexibility to
cover 14 medications and services used to prevent the exacerbation of
chronic conditions prior to meeting the plan deductible. Based on
previous survey and studies, this Fast Fact reports on some of
the cost changes that occurred based upon the impact of this new IRS
rule.
According to the 2021 EBRI survey, employers would add coverage for additional services if allowed by the IRS. Key Findings From the Study: There is also bipartisan, bicameral legislation that has been introduced in the U.S. Congress that would provide 2 additional flexibility to extend pre-deductible coverage to services that manage chronic conditions (S. 655). • Cost sharing shifted from deductibles to copayments and coinsurance among enrollees in HSA-eligible Employers and policymakers have an appetite for more flexible plan designs or “smarter ” deductibles, because health plans for a number of services impacted by IRS Notice 2019-45. The same shift was not observed September 7, 2023, #480 rising health care spending has created serious fiscal challenges. Smarter deductibles may also benefit plan for enrollees in other types of health plans. enrollees. • IRS Notice 2019-45 appears to have had a negligible impact on overall cost sharing as a percentage of About EBRI: The Employee Benefit Research Institute is a private, nonpartisan, and nonprofit research institute total spending on a number of services impacted by the notice. This may be due to the fact that employers Cost Sharing Shifted Away From Deductibles When based in Washington, D.C., that focuses on health, savings, retirement, and economic security issues. EBRI does were more likely to change their cost sharing approach instead of eliminating it. not lobby and does not take policy positions. The work of EBRI is made possible by funding from its members Employers Added Pre-Deductible Coverage for Preventive and sponsors, which include a broad range of public and private organizations. For more information, visit Figure 2 www.ebri.org. Services in Response to Increased IRS Flexibility Cost Sharing by Type of Health Care Service, Among HSA-Eligible Health Plan Enrollees A Thank You to S O Sur Fu RIs fon r der Dep s: re Thi ssis s ontudy was conducted through tIhe EB nsulin R &I C Oten hetrer G flo ur co Rse ese -L ao rch o werin H ng A ea gle th nts IRS Notice 2019-45 allows health savings account (HSA)-eligible health plans the flexibility to cover 14 for Diabetes Benefits Innovation (EBRI CRHBI), with the funding support of the following organizations: Aon, Blue Cross medications and services used to prevent the exacerbation of chronic conditions prior to meeting the plan 2018 2021 Blue Shield Association, ICUBA, JP Morgan Chase, Pfizer, and PhRMA. deductible. A 2021 Employee Benefit Research Institute (EBRI) survey of employers collected information on 2018 2021 60% 55% their response to the 2019 guidance and found that many employers added pre-deductible coverage as a result of 49% 50% 50% ### 40% the IRS notice. A recent EBRI report based on claims data from about 2 million HSA-eligible health plan 39% 37% 40% 40% enrollees confirmed the findings from the 2021 EBRI survey — fewer enrollees in HSA-eligible health plans have 31% 30% 27% 26% 30% 25% 30deduc % tibles for services impacted by the IRS notice, and cost sharing has shifted from deductibles to copayments 24% 19% and coinsurance. 20% 20% 10% 10% IRS Notice 2019-45 0% 0% Deductible Copay Coinsurance Deductible Copay Coinsurance The U.S. Department of Treasury issued guidance on July 17, 2019, via IRS Notice 2019-45 to further Statins for Heart Disease Beta Blockers for Heart Disease increase the flexibility of HSA-eligible health plans to cover specific low-cost preventive services to 1 prevent the exacerbation of chronic conditions on a pre-deductible basis. 2018 2021 2018 2021 Figure 1 60% 50% 43% 49% Chronic Disease Management Services in the Expanded Safe Harbor 50% 36% 40% Preventive Care Service For Individuals Diagnos 33% ed With 31% 31% 35% 40% 32% 32% Congestive heart failure, diabetes, and/or coronary artery 26% 30% 30% Angiotensin-converting enzyme (ACE) inhibitors 30% disease 22% 20% Antiresorptive therapy Osteoporosis and/or osteopenia 20% Beta blockers Congestive heart failure and/or coronary artery disease 10% 10 % Blood pressure monitor Hypertension 0% 0% Inhaled corticosteroids Asthma Deductible Copay Coinsurance Deductible Copay Coinsurance Insulin and other glucose-lowering agents Diabetes Retinopathy screening Diabetes Antiresorptive Therapy for Inhaled Corticosteroids for Asthma Peak flow meter Asthma Osteoporosis/Osteopenia 2018 2021 Glucometer Diabetes 2018 2021 Hemoglobin A1c testing Diabetes 60% 54% 90% International normalized ratio (INR) testing Liver disease and/or bleeding disorders 77% 76% 50% 45% 80% Low-density lipoprotein (LDL) testing Heart disease 70% Selective serotonin reuptake inhibitors (SSRIs) Depression 37% 40% 34% 60% Statins Heart disease and/or diabetes 50% 30% Source: https://vbidcenter.org/initiatives/hsa-high-deductible-health-plans-2/ 40% 19% 20% 30% With IRS Notice 2019-45 in place, all HSA-eligible health plans are now able to adopt a more flexible 12% 17% 20% 13% benefit design offering more protection for certain medical services through a value-based insurance design 11% 10% 5% 10% (V-BID) plan structure. 0% 0% Deductible Copa y Coinsurance Deductible Copay Coinsurance 1 See https://www.irs.gov/pub/irs-drop/n-19-45.pdf. 2 See https://www.congress.gov/bill/118th-congress/senate-bill/655. Source: Employee Benefit Research Institute estimates based on administrative enrollment and claims data. EBRI on Twitter @EBRI or twitter.com/EBRI LinkedIn: linkedin.com/company/employee-benefit-research-institute E EB BR RI I on on T Twitt witte er r: : @ @E EB BR RI I o or r twit twitte ter r..c com/ om/E EB BR RI I L LinkedI inkedIn: n: li linke nkedin. din.c com om/compa /company ny/e /empl mploye oyee e- -be bene nef fit it- -r re es se ea ar rc ch h- -ins insti titu tute te © 2023, Employee Benefit Research Institute, 901 D St. SW, Suite 802, Washington, DC 20024, 202/659-0670 | ebri.org 2 3